ECB's Kranjec: EU Summit Moves 'Radical'

By IBT Staff Reporter On 12/12/11 AT 7:21 PM

Decisions reached by the European Union summit last week are "radical" and will lead to harmonization of policies which has not been possible so far, European Central Bank Governing Council Member Marko Kranjec said on Monday in a TV interview. Photo: REUTERS

(REUTERS)-Decisions reached by the European Union summit last week are radical and will lead to harmonization of policies which has not been possible so far, European Central Bank Governing Council Member Marko Kranjec said on Monday in a TV interview.

He also said in an interview on Television Slovenia that the euro will survive the present euro zone debt crisis.

I see that (the result of the summit) as a good achievement of the politics in Brussels, more could not have been expected, truly radical changes have been reached regarding harmonization of public finances, said Kranjec.

He pointed out that automatic sanctions will be imposed for breaching the budget deficit rules and that countries will have to put the new rules into their constitutions.

I am sure that the euro will stay ... because any country that would want to exit the monetary union would be worse off (than in the euro zone), he added.

Europe is determined to play an important role in the global market, global politics, global economy and it can only reach that by integration, also monetary integration, said Kranjec.

Although a deal was reached at the summit to strengthen budget discipline it failed to restore financial market confidence on Monday but Kranjec said the markets needed more time to react to the deal.

The Brussels deal with be an important step towards stabilization and further preventing of the crisis in the euro zone, added Kranjec.

The outcome of the two-day EU summit last week was criticized by major credit rating agencies. Kranjec said the agencies should not be given too much credit since in the past (before the global crisis) their ratings of financial markets and states were higher than they should have been.